Citigroup and Bank of America prepare Dublin Brexit plans

Envoy says UK capital to remain Europe’s finance hub

London’s Canary Wharf financial district. Photograph: Stefan Rousseau/PA Wire

London’s Canary Wharf financial district. Photograph: Stefan Rousseau/PA Wire

 

Two of the US’s biggest banks are preparing to signal plans to expand in Dublin as they prepare for Brexit, in what is likely to result in the addition of hundreds of financial jobs.

Citigroup, which is set to confirm on Wednesday that it has chosen Frankfurt as its future European Union equities and bond trading centre, is also looking to add to its existing 2,500 workforce in the Republic as it advances plans to deal with the UK’s exit from the EU. It is understood that the statement is likely to reference Dublin.

Sources have said that Bank of America is also planning to detail in the coming weeks how it intends to expand in Ireland in order to bolster access to the EU market.

The group’s Bank of America Merrill Lynch operation in Dublin is known to be in the process of extending its existing lease, which runs out next year, on an almost 7,031sq m (75,688sq ft) building in Leopardstown, about 10km south of the city centre. It is also in talks to rent up to a further 2,000sq m of space, sources said.

In addition, the Wall Street giant, which informed Government officials in February of plans to increase its Irish workforce by 17 per cent to more than 700 people in a non-Brexit-related expansion, has about 2,000sq m of space in Hatch Street in Dublin’s city centre.

Combined, the three office spaces would be able to accommodate up to 1,000 employees, based on typical modern office usage, giving it the flexibility to add up to 300 additional staff.

Spokeswomen for Citigroup and Bank of America, which has previously said it views Dublin as its default option to deal with Brexit, and a spokesman for IDA Ireland, which is responsible for courting inward investment into the country, declined to comment.

The developments mean that three of the US’s largest banks by market value – also including JP Morgan – aim to grow their Irish operations in preparation for Brexit. Brussels-based think tank Bruegel has estimated that London could lose 10,000 banking jobs and 20,000 other financial services roles as about €1.8 trillion of assets are moved out of the UK in the coming years.

The Bank of England ordered banks, insurers and fund managers to file Brexit contingency plans with it before a deadline last Friday.

Meanwhile, the City of London’s special envoy to the EU Jeremy Browne said at an event in Dublin on Tuesday that the union shouldn’t measure the success of Brexit negotiations by how much London is diminished and that there is no alternative to the UK capital as a global financial centre for Europe.

He also called for transitional arrangements to deal with the period immediately after the UK exits the EU in March 2019, in order to make the divorce as smooth as possible.

EY, the accounting and consulting firm, said last week that Dublin and Frankfurt are leading the race among European cities to lure financial firms seeking to move activity from London as the UK plans to exit the EU by March 2019. Some 19 of 59 companies that have indicated they are moving staff or operations have chosen Dublin, marginally ahead of Frankfurt, at 18, and Luxembourg, at 11, according to EY.

Separately, the National Treasury Management Agency highlighted in an investor presentation posted on its website on Tuesday that while Ireland may benefit from an influx of financial activities, Brexit “is likely net negative for Ireland” as trade and tourism suffer.

It added that each 1 per cent drop in the size of the UK economy may lower Ireland’s by between 0.3 per cent to 0.8 per cent.